How France taxes a retirement plan

We model these and we know we do not get them exactly right. Where the size could be measured, it is stated.

• The 10 percent deduction that comes with a French pension belongs to the pension alone. We apply it to your whole ordinary income, so rent or a lump sum from a personal pension plan is relieved as well. For a pension-only retiree it is exact. For anyone else the tax we show is too low, by at most 488 a year at the 11 percent rate and 1,332 at 30 percent.

  Your real tax is higher/up to €1,332 a year/French retirees with rental income, or taking a lump sum from a personal pension plan

• France takes a social charge off your pension before it reaches you, and its rate is picked from a ladder by what your household earned two years earlier: nothing at the bottom, then 4.3, 7.4 and 9.1 percent. We now model the ladder and the two-year look back. What we cannot know is the two years before your plan begins, so in its first year we apply the top rate, which is what France itself does when the tax office has no confirmed figure. For a household that belongs lower down the ladder that costs between 408 and 1,311 in that one year and nothing afterwards.

  Your real tax is lower/up to €1,311 once/anyone on a French pension below roughly 29,400 a year, or a couple below about 40,600, in the first year of their plan only

• France gives an extra deduction to people aged 65 and over, worth up to 2,822 of income. We grant it whatever your age, because we hold no age test for it. Retire at 55 and we show 310 to 847 a year less tax than you would actually pay, and retiring before 65 is exactly the plan this tool is built for.

  Your real tax is higher/up to €847 a year/anyone retiring in France before 65

• That same deduction only doubles for a couple when both partners are 65 or over. We double it for any couple, so if one of you is younger we hand over up to 2,822 of deduction you are not entitled to. A household in that income range is taxed at nil or 11 percent, so the tax we show comes out up to 155 a year too low.

  Your real tax is higher/up to €155 a year/French couples where one partner is 65 or over and the other is not

• One of the health charges on a French pension falls at 1 percent on the workplace top-up part alone, and we never ask how your pension splits between the state scheme and the top-up. We charge a blended 0.4 percent across the whole of it instead. That is out by up to 0.6 percentage points of your pension either way, too high if yours is mostly from the state scheme and too low if the top-up is large.

  Could go either way/anyone whose French pension is mostly from the state scheme, or mostly from a workplace top-up

• French rent carries social levies of 17.2 percent on top of income tax, or 18.6 percent if the property is let furnished, and we charge neither. That is 1,720 a year missing for every 10,000 of unfurnished rent. Two allowances we also leave out pull the other way, 30 percent on small unfurnished lettings and 50 percent on long-term furnished ones, so we cannot tell you which side we land on. Treat the tax here as not covering a let property.

  Could go either way/anyone with a let property in France

These exist in law and we leave them out, usually because applying them would need a question we do not ask.

• About a third of French household financial wealth sits in assurance-vie, the life assurance savings wrapper, and we do not model it. Its tax is far lighter than the plain taxable account we assume: only the growth part of a withdrawal is taxed, that growth gets a yearly allowance once the policy is eight years old, and the income tax rate falls to 7.5 percent. If your savings sit in one, we show 3,179 to 8,754 a year more tax than you would pay.

  Your real tax is lower/up to €8,754 a year/anyone whose French savings sit in a life assurance wrapper, which is where about a third of household financial wealth is

• France's wealth tax reaches property and nothing else. Shares, bonds, cash and the non-property part of a life assurance policy are all outside it, so a portfolio pays no French wealth tax however large it grows. Property worth more than 1.3 million after the mortgage is charged 0.5 to 1.5 percent a year, and we do not model that. For the property-heavy household in our source material it is about 6,210 a year we never show.

  Your real tax is higher/up to €6,210 a year/anyone whose French property is worth more than about 1.3 million after debt

• Retire to Guadeloupe, Martinique or La Réunion and your French income tax is cut by 30 percent, up to 2,450 a year. In Guyane and Mayotte it is 40 percent, up to 4,050, and the social charge thresholds are higher as well. We assume you are in mainland France, so if you are not, the tax we show is too high by as much as those caps.

  Your real tax is lower/up to €4,050 a year/anyone retiring to Guadeloupe, Martinique, La Réunion, Guyane or Mayotte

• You can ask for your interest, dividends and gains to be taxed at your normal income tax rates instead of the flat 31.4 percent. It is all or nothing, and it only pays off at the bottom of the scale. We never ask for it, so a retiree on a small income sees up to about 980 a year more tax here than they would pay. On the two larger pensions in our source material, asking for it would have cost 1,231 and 4,389.

  Your real tax is lower/up to €980 a year/a French retiree whose income tax rate is nil or 11 percent and who would make the choice

• The PEA, France's share savings plan, pays no income tax at all once it is five years old, only the social levies on what you take out. We have no account that is free of French income tax, so money held in one is charged 12.8 percentage points more here than it would be. You can put 150,000 into it and it has to hold mostly European shares.

  Your real tax is lower/anyone holding a French share savings plan that is more than five years old

• Two surcharges land on very high incomes: 3 percent above 250,000 for a single person and 4 percent above 500,000, plus a floor making sure such a household pays at least 20 percent of its income in tax. Neither comes near the incomes this tool is built for, so we leave them out. If your retirement income runs past 250,000, the tax we show is too low.

  Your real tax is higher/a French household with more than 250,000 a year of income

• The guaranteed fund inside a French life assurance policy has 17.2 percent of each year's credited interest taken at source, about 0.43 percent of what you hold in it per year at a 2.5 percent credit rate. We model neither the policy nor this charge inside it. The policy as a whole makes a French retiree's tax lower and this piece of it makes their tax higher, so the two do not point the same way.

  Your real tax is higher/anyone holding the guaranteed fund inside a French life assurance policy

• France has savings accounts whose interest is free of income tax and of social levies alike: 22,950 in the Livret A, 12,000 in the LDDS and 10,000 in the LEP, so a couple can hold 69,900 of cash that is taxed at nothing. We have no tax-free cash account, so we charge the full 31.4 percent on interest you would in fact keep whole.

  Your real tax is lower/anyone holding a cash buffer in a French tax-free savings account

• Every French homeowner pays a yearly property tax to their commune, and we do not charge it. We hold no figure for it either: the rate is set locally, and two identical houses can be billed amounts that differ by a factor of two or more. Look up your own bill and make sure the housing costs you entered already include it.

  Your real tax is higher/anyone who owns their home in France

Separate tax systems, or rules that only bite outside a retirement plan.

• French tax is collected as you go, taken monthly from your pension and withheld from investment income, then squared up at the yearly assessment. We work in whole years and show the settled figure. That changes when you pay rather than how much, so nothing is missing from the yearly total because of it.

  Could go either way/anyone budgeting month by month rather than year by year